Vedanta and Zambian Government Resolve Disputes Over Konkola Copper Mines

6 Sep 2023 , 11:20 AM

Vedanta Resources Ltd. and ZCCM Investments Holdings Plc (ZCCM-IH) have agreed to resolve their disputes over the Zambian Konkola Copper Mines (KCM).  KCM was placed under provisional liquidation in 2019 by former Zambian President Edgar Lungu’s administration, leading to accusations against Vedanta regarding expansion plans and tax payments, sparking legal conflicts.

The resolution marks the end of a four-year legal battle over KCM’s ownership following the presidency of Hakainde Hichilema, Lungu’s successor. ZCCM-IH stated on September 5, declaring that all disputes between the parties have been resolved, and proceedings related to the disputes will be withdrawn, with each party bearing its costs.

The KCM board will be reinstated, and Vedanta Resources Ltd. will return to its previous role as the majority shareholder of KCM. This resolution represents a significant victory for Anil Agarwal, who has been striving to regain control of Konkola, and it may benefit the Zambian government if Vedanta follows through on its commitment to invest $1 billion over five years to complete an expansion.

The deal’s finalization could contribute to the revival of Zambia’s copper industry, with the government aiming to increase national production to 3 million tons annually by 2031. Before the liquidation, Vedanta held a 79.4% stake in Konkola, while ZCCM-IH owned the remaining share.

The transition period for Vedanta to assume operational control of Konkola is estimated to take about three months. As part of the agreement, the Zambian government will reinstate its golden share in Konkola, granting it veto rights over the company to ensure world-class standards.

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